Bunge touches 22-month high as consolidation talk swirls

Reuters Staff

2 Min Read

CHICAGO, May 24 (Reuters) - Shares of Bunge Ltd touched a 22-month high on Wednesday, signaling investors’ hopes for consolidation in the commodities sector even after the U.S. agribusiness said it was not in M&A talks with the agricultural unit of Glencore Plc.

Bunge shares were trading slightly higher at midmorning at $81.97 after earlier touching a peak of $82.66, the highest since July 2015. Glencore shares slipped 0.1 percent to 291.75 pence.

News that Glencore Agriculture Ltd, a joint venture owned by Glencore and two Canadian pension funds, had informally approached Bunge about a “possible consensual business combination” sparked Bunge’s sharpest rally in more than eight years on Tuesday.

Merger expectations have been swirling around large grain traders for months following a string of poor earnings results and Bunge’s Chief Executive Officer Soren Schroder said earlier this month that the White Plains, New York-based company was prepared to take the lead in any dealmaking.

Glencore CEO Ivan Glasenberg said on Wednesday the company is looking to expand its agriculture business but has no plans to move into any commodities it does not already trade.

Glencore Agri is one of the world’s largest suppliers of sugar, wheat and pulses such as peas and lentils. The company also trades cotton, corn, barley, sorghum, soybeans, canola and other oilseeds, edible oils and meals.